When he was a very, very young boy he was in a gang with ‘Piggy’ Muldoon. He was one of Piggy’s favourites. Sometimes when Piggy would smile at him and pat him on the head. Those were the nights that John enjoyed most.

He thought back to them when he became mayor of a very small council called Auckland City.

He was mayor of a very small council, but he wasn’t content.

He wasn’t content because John didn’t want to be mayor of a very small council. A man who was one of Piggy’s favourites deserved better, he thought. And because he didn’t want to be mayor of a very small council, he borrowed a lot to make himself look bigger. It worked for Piggy, he thought. Well, for a while, anyway.

So, like Piggy, he borrowed an awful lot. He borrowed nearly one billion dollars, more than any mayor had ever borrowed before! And boy, did he and his small council have fun spending it. He felt really big, and really, really important. And people liked him, or seemed to.

Things were good.

For a while, anyway.

But John still wanted to be mayor of a big council. Of a really big council.

So when his friend Rodney amalgamated all the small Auckland councils into one big one, John knew what to do.

Unfortunately, his arch-enemy Len knew how to do it better.

So when Len did him out of the job Rodney had made for him, the job running the big council, John was really jealous. And he was especially jealous when Len said his big council was going to borrow 3.2 billion dollars, a quarter of that just to cover Johns’ debts. And he was green with envy when Len promised to crank up the debt to six billion dollars in five years time.

John was jealous, but he said nothing. He said nothing, because John had a new job. Another job. A job wearing yellow, drinking cups of tea in public, and telling people who run things they should borrow a lot less.

And no-one else wearing yellow seemed to notice what John had learned from Piggy. Or that he dribbled occasionally whenever someone mentioned Len. Or Len’s borrowing.

Not everyone will be comfortable with the proposals in the paper, but the Law Commission has, I think, admirably fulfilled its brief of providing a basis for discussion. And, finally, the role of a free and robust press in a democracy is strongly and repeatedly emphasised in this discussion paper. Given that the minister who commissioned this review did not think to say so, I am particularly glad the Commission has.

What’s going on in Europe economically is impossible to understand without getting your head around what’s happening in Europe politically.

And it’s virtually impossible to understand what’s happening in Europe politically without having some idea of the on-going European political project: the European Union, or EU.

Because while the European Union had its beginnings in the benevolent notion that free trade would give Europe the peace it has so rarely enjoyed historically—the idea best summed up by the great Frederic Bastiat as “if goods don’t cross borders then armies will”—it has in more recent decades been more interested in regulation than in trade, and more in political union than in economic prosperity.

This is one reason that everything in Europe looks upside down economically—overspending “cured” by more spending; over-borrowing “cured” by more borrowing; debt “fixed” by the creation of more debt, and IOUs “written off” by the creation of more IOUs.

Where other countries kick cans down the road, the European Union kicks whole kegs. And this is a keg that won’t take much to explode.

So the house the European Union has built is now incredibly fragile, both economically and politically. Which is why even the relatively tepid “No"!” flung in the face of Europhiles over the weekend by British Prime Minister David Cameron was enough to give them conniptions.

If you want to start understanding why, and to understand what’s been happening in Europe politically, might I suggest you start with Liberty Scott’s excellent primer on the subject, the first part of a series:

It’s spending a lot more than it takes in, at a time when it has a lot less.

It is spending a lot more at a time when it has a lot less because some alleged economists tell them this this is A Good Thing.

Because cutting costs is politically difficult when you just want to be liked.

And because cutting spending is logistically difficult when public sector unions resist every cut in spending, and go apoplectic when cuts in salaries are even contemplated. Even if a lack of cuts loses jobs.

“With the demise of ACT and the disappearance from Parliament of oddballs and eccentrics like John Boscawen and Hillary Calvert, NZ First is stepping up and filling the void.” Thank goodness. "You talkin' to me?" – I M P E R A T O R F I S H

Despite their party’s relative electoral success, not all Greens were happy campaigning on holidays swimming in rivers, pink batts for children, and jobs constructing windmills. Back of the brain niggles– G B L O G

Letter of the week in The Press: “Remember every time you enjoy a latte … you are lucky to have the benefits of capitalism,” begins The Press’s letter writer of the week… In praise of capitalism – H O M E P A D D O C K

“I watched the ECB announcement press conference last night. You can find it below. I recommend you watch it in full. The Q&A session at the end contains the most important parts. After watching it, I am still in shock.” Europe’s last hope collapses - Z E R O H E D G E

Government debt, aka sovereign debt, used to be thought of as a risk-free investment. That’s one theory that’s now been thoroughly exploded by reality. The Risk of Sovereign Debt – David Howden, M I S E S E C O N O M I C S B L O G

Want to understand Detlev’s argument without buying his book? Then try this:

Peter Schiff dismantles the many economic fallacies in Obama's latest speech, ending with this important point: "The reason the middle class is getting squeezed [and] the reason [it] is disappearing is because those freedoms that created it are also disappearing. It's because the 'simple theory' [of capitalism] has been abandoned by so many people and replaced with this nonsense that President Obama believes in, and of course the more we pursue these policies, the more people are going to leave the middle class and the more people will be impoverished." [Hat tip Objective Standard]

Here’s a link to Ross England’s winning entry in the U.S. Atlas Shrugged Essay Contest. Note to local Objectivists: Time to start organising for the local competition next year, right? I Won!/Read Atlas Shrugged! - T H I N K T W I C E

Pirate radio stations were free-market heroes, bashing down ridiculous government restrictions on radio broadcasting by taking their signal out into international waters to escape the grey ones. But what if you could do the same thing to get around ridiculous immigration restrictions? New Startup Hopes to House Immigrants in International Waters – M O T H E R O F E X I L E S

A scientist explains in layman terms “why rather than being a refutation of factual knowledge, quantum physics is a testament to the fact that knowledge is possible, and can be obtained with certainty." The Certainty in Quantum Physics – W I T L A B

When I was a child, I spoke as a child, I understood as a child, I thought as a child: but when I became a man, I put away childish things. Except no-one puts them away entirely. Nor should they. Here’s The Damned, and they’re playing Auckland in January.

And so are the Dresden Dolls…

And to close with something completely different, from the finale of Wagner’s opera Siegfried ( on screen around the country this weekend) here’s the dawn. And if you’re wondering why she’s sleepy, well, you would be too if you’d been awakened after an eighteen-year sleep. “Hail the Sun!”

Thursday, 8 December 2011

Today I offer you a video on how to appreciate non-music like a wanker: which is, whatever posturing nonsense is going on up there on stage, just sit there like a pseud pretending there’s really something going on.

Here’s a “concert performance” of John Cage’s famous 4’33”—a godsend if you can find it on a West Auckland jukebox, but a complete joke in a concert hall.

Watch a pair of BBC wankers talk about it, and a whole concert hall of pretentious twats who showed up specially for the occasion…

The Maritime Union don’t care who they hurt. Their basic premises are the same as every unions has ever been:

the erroneous idea that workers own their job;

the advancement of one group of workers at the expense of all others;

the placing of the union’s interests above even that of its members…

Let’s consider these propositions.

Employees own their labour services. But they don't own their jobs. The erroneous idea that workers do own their jobs is one leg of what gives unions their power to destroy.

Workers are certainly entitled to withdraw their services when they choose, but nothing in justice gives them the right to exclude others by from replacing them. There is no right, in justice, that gives one group of employees the right to exclude others—especially not by force.

They do not own their jobs.

Yet law has been written that protects this non-existent right. It is law that advances one group at the expense of many others, and places the interests of union leaders above that of of their members—who are all too frequently called upon to help destroy the very employers, customers and supply chains on which their own prosperity depends.

Don’t get me wrong. Folk should be free to voluntary join whichever organisations they choose. That is a genuine right worth protecting. But the extent to which industrial unions have been granted legal powers to forcibly exclude others from replacing their services—to wage strike action against employers and businesses, to run pickets shutting down companies and forcibly excluding supplies, customers and replacement labour—is the extent to which governments have given unions power beyond right to damage the welfare of everyone, including their own members.

William Thompson was a colleague of Robert Owen, and a founder of so-called “scientific socialism.” Which is to say that he was no friend of business. Yet he observed that the union’s “excluding system depended on mere force and would not allow other workers to come into the market at any price…”

“Thompson can hardly be regarded as a biased witness against working-class bodies. He was, we are told, of the most kindly and gentle disposition, but when he considered the workmen’s combinations of his day he was moved to passionate condemnation of them. To him they were ‘bloody aristocracies of industry... [The] excluding system depended on mere force and would not allow other workers to come into the market at any price…It matters not,” he said in 1827, “whether that force…be the gift of law or whether it be assumed by the tradesmen in spite of the law: it is equally mere force.” “Gains [of the unionised few] were always ‘at the expense of the equal right of the industrious to acquire skill and to exchange their labour where and how they may.’ This is the founder of scientific Socialism speaking - not an employer.” **

Antediluvian unions like the Maritime Union could not survive without the sort of “legislation beyond right” that protects their non-existent ownership of job placements. Yet today pro-union legislation remains a sacred cow—a set of destructive legal principles based on poor logic and ideological quicksand. As William Jevons pointed out in his 1883 book Methods of Social Reform and Other Papers:

Firstly. The supposed struggle with capitalists in which many Unions engage, for the purpose of raising wages, is not really a struggle of labour against capital, but of certain classes or sections of labourers against other classes or sections. Secondly. It is a struggle in which only a few peculiarly situated trades can succeed in benefiting themselves. Thirdly. Unions which succeed in maintaining a high rate of wages only succeed by PROTECTION—that is, by levying contributions from other classes of labourers and from the population in general. Fourthly. Unionism as at present conducted tends therefore to aggravate the differences of wages between the several classes of operatives; it is an effort of some sections to raise themselves at the expense of others.”

“An effort of some sections to raise themselves at the expense of others.” So it is too with the minimum wage, which as Eric Crampton shows assiduously in repeated posts, raises wages for those in employment at the expense of those who aren’t, while reducing total incomes all round—yet raising the minimum wage is still a favourite of the likes of Matt McCarten’s Unite union, which is happy to impoverish those youngsters who a high minimum wage makes unemployable just so Matt McCarten can advance his own power.

Hence the reason I have no time for Matt McCarten. Or the Maritime Union.

At the end of the day what the Maritime Union leaders want at the Ports is more power and prestige for themselves. Yet for some reason those outside the Union whose incomes are reduced by their actions can still be heard offering support. They should listen to William Jevons, who concluded:

“The Unionist overlooks the fact that the cause to which he is so faithful, is only the cause of a small exclusive class; his triumph is the injury of a vastly greater number of his fellow-workmen, and regarded in this point of view, his cause is a narrow and selfish one, rather than a broad and disinterested one. The more I admire the perseverance, the self-forgetfulness, the endurance, abstinence, and a hundred other good qualities which English workmen often display during the conduct of a great trade dispute, the more sincerely do I regret that so many good qualities should be thrown away, or rather misused, in a cause which is too often a hurtful one to their fellow-men.”

At a time when jobs are scarce, money is short and everyone is having to tighten their belt, perhaps all sides might reflect on that.

Because as these economists and social reformers remind us, the extent to which these unions and every other are successful in their successful in their demands and destructive in their means of achieving them, they harm every other group in society.

• Your immediate boss is drunk enough to be slurring his or her speech. +1 drink• There is no real food at the party. -2 drinks• You have a meeting the next morning before 10 a.m. -1 drink• There are shareholders at the party. -1 drink for each one you'll have to meet• You have a crush on someone at the office, and either they, or you, is married. Have zero drinks — trust me• You have a crush on someone at the office and you are both single. +1 drink, and make sure you don't have anything in your teeth• Wrestling of any kind breaks out among co-workers. +3 drinks• That intern actually does have some pretty good weed. +1 joint

In the end, what you really want to do is let yourself have a good time, while keeping in mind that things can get out of hand much more easily than you might think. But if they do, it's not like ripping off your shirt and singing ABBA to your boss is the end of the world, right? Right?

It should be no surprise because as folk get wealthier, the gap between higher incomes and lower incomes do become larger. Transplant Bill Gates and Warren Buffet and J.K Rowling to New Zealand, and overnight you raise the “income gap.” That’s just the nature of arithmetic, I’m afraid. As the income “spread” gets wider, so-called “inequality” increases.

But the news should also be no surprise to New Zealanders in any case, because from the mid-seventies to the mid-eighties Sir Robert Arsehole Muldoon treated everyone equally.

That is to say, he treated everyone like shit.

And so-called “richer” folk got treated more like shit than most, paying capital gains taxes, taxes on higher incomes at around 66%, and “ad hoc” taxes everything from caravans, to lawnmowers to backyard boats—paying and paying just to keep bankrolling Muldoon’s accelerating borrowings, by which means he pretended he was keeping the country above water.

So when Muldoon was removed and the process was begun of removing the shackles he placed on the country, it’s no wonder “income inequality” increased. Because people were finally allowed to get rich. Or at least, not so poor.

That was a good thing. Folk on lower incomes found it somewhat easier to move up to earn higher incomes; folk with good ideas found it easier to get out and make money from them; and folk with capital to invest found it easier to invest and earn money from their investments. It’s called “mobility,” a concept that describes the dynamic situation in which the folk who make up the various income “classes” are constantly churning, constantly changing, constantly being refilled—and the freer the place is, the more easy it is to take advantage of this and move yourself up the pay scales.

It’s one reason so many of this country’s richest folk got there not by breeding but but hard work, why so many are self-made men and women—with the very richest beginning his days as a panel-beater, and now able to buy and sell some of the world’s largest companies.

It’s called mobility, and it’s one-hundred times more important that an enforced equality.

SO THAT WAS WHAT happened from 1985 to 1996, the period the OECD deplores. People got freer, and were allowed to get richer. The OECD’s report writers obviously hate that sort of thing.

The bad thing was what happened afterwards. What happened afterwards was nothing, for most of the late nineties—which was bad enough since there were still many shackles that remained—and then as the new century dawned new ones were put in place. And those shackles have stopped the mobility.

By putting even moderate earners on an effective marginal tax rate of 95%, Working for Families has made it harder to increase your take-home income. By regulating businesses into the ground, governments made it harder and harder to start and run a business. By telling employers they had to pay youngsters more than they were worth, they made it harder for those youngsters to get their first foothold on the economic ladder. And by educating youngsters that not offending people is more important than being able to read and write, schools made it harder for youngsters from poorly-educated homes to make themselves employable at all.

Things got worse, not better. This was the decade in which things stood still again. People were made neither more “equal” nor less. It was just made harder to do either.

BUT HERE’S A SIMPLE fact to contemplate, and some of you might have to sit down to take it in: people are not equal.

There, I said it. People are not equal, and their “outcomes” will not be the same. People who run faster will win more gold medals. People who think more acutely will write better software. And people who look hotter will get more sex.

That’s not “injustice.” That’s just reality. And nothing any politician or report writer can do can change that. As Ayn Rand used to say,

If there were such a thing as a passion for equality (not equality de jure, but de facto), it would be obvious to its exponents that there are only two ways to achieve it: either by raising all men to the mountaintop—or by razing the mountains.

Naturally, the exponents of forced equality always end up advocating the latter. In Pol Pot’s Cambodia that translated as emptying the cities of people and killing everyone with the spark of intelligence in their eyes. In today’s political environment, it translates simply as “soak the rich.” And voices are already out there this morning calling for “the rich” to be variously soaked, stolen from and boiled in oil. (Isn’t it amazing how simple envy can make folk lose their marbles.)

AND OTHER VOICES WILL be out there soon, if they’re not out there already, talking perfumed nonsense about how they aren’t for the Procrustean Bed of enforcing equality of outcome—they, these enlightened folk, are interested only on equality of opportunity, by which they mean further violation of individual’s freedom to pursue the many opportunities that reality offers them.

Because reality has no short supply of opportunities, just as long as one is left free to follow them. Opportunities are everywhere.

Opportunities are everywhere. It's not the abundance of opportunities that is a problem, but the paucity of vision that is unable to see them.

So it’s not some bogus “equality of opportunity” that folk should think about and promote, it’s freedom of opportunity, by which we mean the ability to exploit the opportunities afforded by reality, without being stopped by government.

John Banks’s Spending cap proposal is pseudo-conservative window dressing. Limiting increases in government spending to population growth and inflation, unless the Finance Minister goes to Parliament. Isn't that what a finance minister does whenever they present a budget? - Stephen Berry, posting in SOLO’s “Banksification of ACT” thread

That’s right, US$7.7 trillion. Secretly created by the Fed out of thin air, loaned to the banks at zero interest … and then “borrowed back” at a higher rate in order to help banks who’d stopped bothering even trying to help themselves.

… National Australia Bank [ASX: NAB] had to borrow USD$4.5 billion from the US Federal Reserve during 2008 and 2009. And Westpac Banking Corp [ASX: WBC] needed USD$1.09 billion in January of 2008 and 2009… Westpac and NAB needed the loans because they were on the verge of going belly up… For the past two years you’ve had to put up with a constant drone of commentary from the mainstream telling you that Australia’s banks are different… this bombshell from the Federal Reserve proves otherwise. And it proves we at Money Morning Australia have been right to call the Aussie banks for what they are.

The Fed is correct: $7 trillion was counterfeited and handed out to the friends of Federal Reserve. The real number is not $7 trillion, it was a mammoth sixteen trillion dollars that was counterfeited and handed out to the friends of Federal Reserve. SOURCE: page 144 of this document: www.gao.gov/new.items/d11696.pdf

Libertarianz leader Dr Richard McGrath said this morning he was pleasantly surprised by the deal struck between ACT and the National Party which would allow for the introduction of charter schools in New Zealand. “This is a significant move away from the tired and out-dated system of state schools, which are little better than juvenile prisons churning out tens of thousands of functionally illiterate youths each year.” “My party is particularly impressed by the adherence to principle represented in this radical reform.” “National have stuck true [for once] to their core values of individual freedom and choice, personal responsibility, competitive enterprise and limited government. Likewise, ACT’s founding principles state that individuals are the rightful owners of their lives and therefore have inherent rights and responsibilities; also, that the proper purpose of government is to protect such rights and not assume these responsibilities.” “While the two Davids flounder about in the wake of the worst election result for Labour in living memory, the two Johns have come up with a breakthrough in education that my party hails as a bold move in the right direction - toward greater ownership of education by students and their parents rather than by teachers’ unions.” “Let’s hope John Banks can continue to abide by ACT’s liberal values. The Libertarianz Party will cheer him when he does, and pull him up when he veers away from the path of freedom.”

First, a note of caution in all the American studies - charter schools operate under regulatory constraints and vehement opposition from American teachers unions, both of which may affect observed results.

Upshot: charter schools do better, and because they're outside of collective bargaining and because they face the risk of shutting down if parents don't choose to send their kids there.

Other evidence?

In another randomized trial, Caroline Hoxby finds substantial gains for students winning entry to charter schools in New York.

New Zealand homes are overvalued by 25 per cent and the country is one of nine under threat of a housing bubble burst, says the Economist magazine in a report titled “House of Horrors.”

The bursting of the global housing bubble is only halfway through, says the Economist, and next in line to hear the pop will be New Zealand, Australia, Belgium, Canada, France, Britain, the Netherlands, Spain and Sweden.

It described the nine countries as being at the same stage as the United States towards the peak of its housing bubble. And we know how that ended up.

It’s not entirely accurate , but this graphic presentation of the wars and battles of the last thousand years—with explosions (not always) showing the number of casualties—is sobering viewing.

Since the birth of history, men have been finding reasons to kill other men en masse and to gain values by conquest.

They never have. They have succeeded only in destroying values, and lives.

“If men want to oppose war,” argued Ayn Rand, “it is statism that they must oppose. So long as they hold the tribal notion that the individual is sacrificial fodder for the collective, that some men have the right to rule others by force, and that some (any) alleged ‘good’ can justify it -- there can be no peace within a nation and no peace among nations.”

Act's lone MP, John Banks, has been making all the right noises about the party's negotiations for a confidence and supply deal with National. There would be gains for Act in the areas of "choice, responsibility and private enterprise", he said after a second round of talks with John Key. The wording was designed to emphasise Mr Banks' affinity with Act's founding principles, and to draw attention away from his previous existence as a Cabinet minister in two National governments. He was, in effect, trying to persuade Act's dwindling number of supporters that he was one of them. It would be understandable if few were convinced… His true colours were revealed when Dr Brash backed the decriminalisation of the personal use of cannabis. This advocacy tallied with Act's promotion of individual freedom and personal responsibility. It was to be expected from a party that embraced classic liberalism. Yet Dr Brash's initiative was rejected out of hand by Mr Banks, confirming that he was very much a social conservative.

A social conservative who only joined the party to get National across the line. Now that it has …

Act exists in name only…. The party's brand has been badly tarnished by a succession of scandals.. Now its only MP does not fit the Act mould. There appears every reason for the supporters of its principles to call it quits and establish a new liberal party. They could do so in the knowledge that there will always be a niche constituency for their core philosophy… It has been suggested that Mr Banks, for his part, would fit far more snugly with the Conservative Party… If Mr Banks were to leave Act and join the Conservative Party, it would, in many ways, serve the interests of both parties… [In any case, as Stephen] Whittington has intimated, Act appears beyond repair. A new liberal party seems the only viable solution.

I agree. And I’m prepared to be part of it.

Why?

Because the ideas and principles that powered both Libertarianz and the ACT Party* are too important to die—as they will do under Banks. Members of both parties, me included, now need to accept that we’ve done a poor job in our respective parties of promoting those principles.

But this is the low point. We can learn from what went wrong with both parties, and from their ashes commit to doing a better job this time.

Who’s with me?

* * * *

* That powered both parties? Well, yes. The ACT Party’s principles were written by Ian Fraser, who left the ACT Party before its first election to found Libertarianz (where he expanded on them). Those principles are as important now as when he first wrote them:

that individuals are the rightful owners of their own lives and therefore have inherent rights and responsibilities; and

that the proper purpose of government is to protect such rights and not to assume such responsibilities.

If a new party can’t coalesce around those principles wHile learning the lessons of the past, there’s something wrong.

Sunday, 4 December 2011

Former ACT candidate Stephen Whittington has now said what was obvious as soon as the good ship ACT crossed the finish line last Saturday with only party hopper John Banks inside the boat: that Project ACT is over.

On his Facebook page Mr Whittington called Mr Banks "economically ignorant and interventionist", in response to the Epsom MP's comments opening the door to Conservative Party leader Colin Craig… "Banks' post-election comments [on Mr Craig] certainly clarify that there is no liberal future in the Act Party.”

And nor is there, as Whittington himself made clear enough in his election night speech to his own supporters:

The media will report that the ACT Party has hung on. In reality, John Banks, with the resources of the ACT Party thrown behind him in Epsom, has hung on. ACT, a liberal party now represented by an MP who has such questionable views on homosexuals and ethnic minorities, and sees it as his personal mission to suck up to National as much as possible, exists in name only…

This is hardly just Whittington’s opinion, it is the opinion of many others as well.

And it’s not just opinion: it’s a simple statement of fact.

Sure, now it can hold its caucus meetings on the back of John Banks’s Harley the ACT caucus is going to be free of all its traditional infighting. But a party-of-one represented only by a bigot and a spendthrift (an overspending mayor, he left the Auckland council nearly one billion dollars in debt) is not a natural repository for social and economic liberalism.

With the captaincy of Banks, ACT is already dead and buried. It has no unique voice, and no more fundamental reason to exist than the Peter Dunne Party.

And with Banks at the helm, ACT is already on the the rocks as a vehicle for social and economic liberalism. So the only reason to stay around and work with Banks is to support Banks. Which means to help bury both ideas.

That might be okay for ACT tribalists like Cactus who just like waving a yellow flag. But for those who got into ACT because they value freedom and responsibility and who saw ACT as the repository for those values, then the time has come to confront reality. Time to move on.

Saturday, 3 December 2011

“The likelihood of Banks transforming himself into a standard-bearer for [ACT’s] values and principles is as great as that of Ahmadinejad converting to Judaism.” - Lindsay Perigo, from his post “The Mortification of ACT: Malpractice by Cactus”

Thursday, 1 December 2011

As the recent Christchurch earthquakes amply demonstrated, an emergency often brings out the best in people . In these situations individuals tend to put aside their differences and spontaneously co-operate to address the common threat to life and property – whether that be pulling co-workers out of the rubble, delivering food to strangers, or helping to shovel out liquefied muck from their neighbours' driveways. Folk exhibit a focus and determination that’s often not seen in their daily lives.

These situations provide an object lesson in what can be achieved by individuals identifying a common goal and putting aside their differences. The co-operation may be only limited, or even temporary, but tangible gains can thus be made.

In a way, all large and successful companies have to achieve a similar outcome. In a small business you might be lucky enough that every person you work alongside has compatible ethics and personality type. In a big corporation this is never going to happen; statistically it’s not going to happen – and certain people just aren’t going to get on. So it comes down to how senior management can channel those differences towards a common goal – in a way that allows both the goals of the company and those of disparate individuals to be achieved. Two individuals may not like each other, and outside of work want nothing at all to do with each other, but they will co-operate and function with each other effectively if they have a common goal within the business.

In a political context, we face a similar threat to our life and property that’s almost as serious as the earthquake. That threat is runaway government expenditure, and the seeming inability of the large political parties to address the train wreck that is surely coming. Our current welfare state is unsustainable, and is an historical anomaly that cannot continue for much longer. Either it goes, or our relative prosperity has to go.

A large number of individuals in New Zealand are aware of this threat, and to varying degrees want to do something about it. In voting behaviour or political affiliation they are spread across a range of parties – Libertarianz, ACT, Conservatives, and perhaps even a reasonable proportion of (very quiet) Nationals. I would estimate that individuals in this category comprise perhaps 10-15% of the voting public.

However they also disagree on a lot as well. Which means at election time, votes get dispersed and made ineffectual. They are either spread amongst the smaller parties so their vote is less than the 5% thresh-hold - or in the case of the Nationals, buried under the pragmatism of the party machine, which places priority on getting elected ahead of anything else.

The political party that aligns most with my beliefs is Libertarianz. However with their radical agenda I struggle to see getting elected in my lifetime. I hope I’m wrong, but I don’t think I am. They present consistent policy on a wide range of issues, but for most voters it’s too big a chunk to digest. Even if people agree with the gist of it, they struggle to see how we can practically go from what we have now to what Libz proposes. So they cast their vote elsewhere.

By the same token, I don’t believe toning down the message is the right solution either. The average voter may know nothing at all about explicit political philosophy, and have no inkling at all of the unsustainability of our welfare state – but they can sense insincerity a mile off. If you don’t say what you mean and mean what you say, people will know. You cannot ‘trick’ people into freedom. If you try, voters will sense you’re hiding something, and run a mile – and that I think largely explains the current unpopularity of ACT.

So what do we do then? We want to encourage co-operation in a political context, so we can make some real and tangible gains in rolling back the state. But we can’t afford to to ‘tone-down’ or moderate our true beliefs either.

Well here’s one scenario that I can see which is realistic, and starts to roll back the stage from the 2014 election onwards:

We form a new political alliance. Not a new party, but a new alliance. For instance, and purely for the sake of this discussion let’s call it GERA – the Government Expenditure Reduction Alliance.

This new alliance is focused on achieving a limited and tangible objective: confronting the biggest ‘emergency’ of our current era by drastically reducing government expenditure. We invite a variety of parties to put aside the things we don’t agree on, and be part of this alliance for the 2014 election. It might include Libertarianz, ACT, and even the Conservatives.

Outside of the election campaign, each party, or even individuals within each party continues to focus on whatever issues are important to them. These may be consistent, or they may be inconsistent (depending on your viewpoint). In the case of certain Libz members it may be marijuana legalisation and abolition of the RMA; for ACT the removal of business red tape; for Conservatives the dangers of the ‘demon drink.’ Whatever – to each their own. Unlike the big parties we don’t try to pretend we agree on everything.

However when it comes to the election campaign, we put aside those differences, and campaign on the earthquake-sized economic disaster and the one objective we all do agree on – runaway government expenditure.

GERA’s specific policy for the 2014 election campaign would need to clear and consistent, and also very concrete and specific. Something the average person can clearly understand. For instance it might be a reduction in government expenditure by 10%, or 20 or 25%, via the elimination of specified government departments, all of which are listed and costed out in detail – combined with a reduction in all tax brackets by 2% (or ten) percent across the board. It’s a modest goal, but something that’s politically realistic in the short term – and attacks the government departments or services that most people can do without.

GERA makes it known that if they achieve MP’s, they will not compromise on any level on this policy. Not one iota. If any of the major parties needs their support to form a government, they will have to implement GERA’s policies in total. The GERA platform is modest in terms of our ultimate goal, but it’s a pill that the bigger parties will be able to swallow it if they have to.

I can easily imagine GERA getting 5-10% of the party vote, perhaps 10-15% - and I can easily imagine them holding the balance of power.

One of the major parties agrees to form a government with GERA, on the basis that GERA will not compromise on their limited bottom line. GERA’s policy is implemented, and we start the process of rolling back the state.

Next election GERA comes up, and we redraft another specific policy platform that continues with further changes in the right direction. We continue to roll back the state incrementally because we can command enough vote to hold the balance of the power.

Sounds easy doesn’t it? And it is.

There is at least one challenge I can see with this, however, something that requires a bit more thought. How would we deal with voting on other matters put before parliament - issues that all members wouldn’t agree on? For instance if a law proposing some form of alcohol prohibition was proposed by the major governing party - Conservatives might be in favour, but Libz would be against. Or the converse would apply if a law providing for liberalization of marijuana were before parliament. If we’re to keep the alliance together, how do we handle this?

One option I can see is that we have the following simple rule: all GERA MP’s will abstain from voting on any issue that is not part of the core GERA platform for that election. This ensures that all members of GERA, and all voters who gave their vote to GERA cannot end up assisting a law they don’t agree with. The result will be same as if the GERA MP’S weren’t there – which is what would happen anyway if GERA was never formed.

Some might protest that this approach is only tinkering. That it doesn’t achieve the radical overhaul needed. Well of course it doesn’t, but it’s at tangible first step. How do you eat an elephant? One mouthful at a time. More importantly, it sets the scene for further and more significant change in latter years. If the average voter doesn’t miss the government departments we abolish in 2014, and can see the tangible benefit of the tax cut in their pay cheque every week, they’ll be motivated to vote for more of the same next election. Along the way, they might start to learn about individual freedom, and why it’s consistent to apply that principle across the board.

It’s often said that political change can only happen once the required philosophical change has happened within people’s heads. I largely agree with this sentiment, but I would add an important qualification: this is not a linear process. Most people do not change their philosophy as a result of reading or listening to speeches, and then go out and implement that in practice. They learn from both hearing the philosophic theory and seeing the results of that theory in concrete practice. A good philosophy encourages good politics, but good politics also encourages good philosophy. People need to see with the tangible benefits of freedom in their own lives.

The scenario I’ve outlined would set up a virtuous circle - whereby people would see the concrete results of greater individual freedom, even if it was only in a limited context. This would encourage philosophic change that was sympathetic to more freedom, which encourages more political change, and so it would go on.

Mark Tammett is a Christchurch engineer and long-time liberty advocate.

Wednesday, 30 November 2011

So now the election’s over, let’s draw inspiration from the productive and good rather than just focussing on the venal and disgusting. In that vein then, here’s Steve Jobs in a 1995 interview “speaking about about the importance of living a life that's fully your own, rather than accepting limits imposed by others…”

and “…on the importance of being willing to act in pursuit of what you want.” Says Diana Hsieh, at whose Noodle Food blog I first saw these (and whose descriptions above I pinched), “I love the benevolence in the initial discussion of asking for and giving help!”

The myth behind all modern economics, which is to say Keynesian economics, is that “the government can always pay.”

It was one of the myths that allowed governments to think they could get away with bailouts, backstops and efforts to “stimulate” their country’s economies with truckloads of borrowed money (a failure of economic theory now exploded by the failure of all economies to be so “stimulated”).

But the debt is now due for all that senseless borrowing. And they can’t pay. They just can’t. There isn’t enough money in the world to pay all the debts they all racked up in a vain attempt to turn bad times into good.

That is the root of the problem in the US, in Japan, in Greece, in Italy, in Spain … and now in Germany.

Because last week saw the beginning of the collapse of even German government bonds (the market for which hit the jitters last week) which suggests the myth that “the government can always pay” is being exploded.

If even the German government can’t attract buyers of its debt, then what’s the future for every other government? Including ours?